Delhi-headquartered International Business Advisors, a full-service audit and tax advisory firm, has been appointed the India affiliate for Arthur Andersen. Puneet Sharma, one of the four partners of the firm, said they were in the process of getting the regulatory approvals for using the Arthur Andersen brand name in India.
“The brand has a lot of goodwill. But re-building its reputation and business will be a long journey,” said Bobby Parikh, partner, BMR & Associates, who headed Arthur Andersen’s India operations till 2002.
Founded in 1913 in Chicago, Arthur Andersen became one among the Big Five professional services firms, with 85,000 employees and $9.3 billion in revenues globally in 2002. However, an accounting fraud in US energy major Enron in 2001 dented the firm’s reputation beyond repair, leading to the disbanding of Arthur Andersen’s global network in 2002.
A partner in one of the Big Four professional services firms, who had worked at Andersen India, noted that the brand had high re-call value with clients. “But just the brand is not enough to build business. It will depend on the value proposition the new firm and its affiliate bring to the table,” he said.
Former employees said there was a particular image that clients and employees attached to the Arthur Andersen brand. “The challenge would be to live up to that image and also bring a differentiated service in the market,” said another ex-Andersen employee.
According to Parikh, the market for professional services in India has changed since 2002. “One would have to first build a scale to compete with the Big Four and that can happen over time,” he said. The Big Four — Deloitte, EY, KPMG and PwC - between them have a top line of around Rs 12,000 crore with interests in auditing and advisory services. Apart from the Big Four, there are 100-odd global audit and accounting networks that operate out of India.
The nostalgia over Arthur Andersen’s revival efforts could be seen in Stephane Laffont-Reveilhac’s March 1 LinkedIn post. There were over 800 comments and more than 2,200 shares of the post. Most comments — largely from ex-employees — gushed over the move and re-called the firm’s heyday and its work culture. One commentator noted: “…it’s not often that former employees talk so positively about their former employer.”
The jury, however, is still out whether the new avatar of Arthur Andersen will live up to its past reputation.
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